Although packer inquiry in cattle-feeding country seemed respectable in the early rounds (i.e., at least in terms of a handful of bids), significant trade volume was never in danger of taking off. For one thing, asking prices opened on firm basis (e.g., $108 in the South and $107-$108/$170 in the North) and stayed that way, especially when live futures managed to move back toward the top of the late-summer trading range. The national hog base is $1.17 lower ($51-$56, weighted average $54.74). Corn futures tried to rally early, but bulls couldn't find enough glue to make it stick. At the close, most contracts were fractionally lower. The stock market closed higher with the Dow up 39 points and the Nasdaq better by 3.
Benefiting from late buying interest, live contracts essentially erased Tuesday's sell-off by closing 60 to 130 higher. Short-covering and bull-spreading seemed to be the major workhorses. After opening lower, December quickly managed to regroup enough buying interest to close back above its 40-day moving average. Following a similar pattern, February successful engineered a late rally to close above its 100-day moving average. Beef cut-outs: significantly lower, off $0.39 (choice, $190.40) to $2.17 (select, $188.69) with light-to-moderate demand and moderate offerings (98 loads of choice cuts, 22 loads of select cuts, 27 loads of trimmings, 17 loads of ground beef).
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT T
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THURSDAY'S CASH CATTLE CALL:
Steady. Look for moderate trade volume to develop on Thursday and/or Friday.
Feeder futures notched moderate progress, supported by spillover buying from the live market as well as positive technical considerations. Closing at $149.87, November scored its highest settlement since July 21. CME cash feeder index: 09/11: $149.02, up $0.05.
Lean hog contracts didn't manage to prove much Wednesday (i.e., beyond underscore short- and long-term downtrends). Settlement prices were mixed in light trade volume, ranging from 20 higher to 65 lower. The carcass value closed modestly lower as softer demand for belly, ham, and butt cuts overshadowed stronger rib, picnic, and loin prices. Pork cut-out: $80.30, off $0.11. CME cash lean index for 09/11: $67.37, off $0.54 (DTN Projected lean index for 09/12: $66.37, off $1).
THURSDAYS CASH HOG CALL:
$1-$2 lower. Cash hog buyers will remain on the defensive in the morning, mindful of both the ease of buying live inventory and the downward slope of the wholesale pork market.
John A. Harrington can be reached at email@example.com
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